Brand is increasingly defined by what people say about a company on the internet. Chris Jackson, of Cicero Consulting, considers how fund management might use and develop social media.
Social media has been one of the defining developments of the 21st century, yet the financial sector has been slow to embrace the opportunities that it provides.
Research by Cicero Consulting done in January demonstrated that the majority of the financial services sector only began to see the value of social media two years ago, with firms only last year beginning to expand their capacity in this area.
This leaves the sector in a situation where only one in ten financial services organisations has social media fully integrated into its business plans.
But is social media something that is relevant for the fund management industry and, if so, how should they develop strategies to use it?
The fund management industry is primarily about B2B (business-to-business) communications, and it would be easy to discount social media as a business-to-consumer tool and, therefore, not relevant. However, this is far from the case, with a range of global brands using social media for B2B purposes, such as American Express and the CalPERS pension fund.
It is possible to identify the benefits that social media offers fund management into four main areas: visibility, engagement, understanding and third-party endorsement.
Developing a social media optimisation strategy is essentially identifying a range of social media platforms to share and host your content on. Increasingly, search engines are using the recommendations of users on Facebook, Twitter and Pinterest to rank companies’
pages in the search result.
Pinterest, which is used by CME Group, leads to improved click-through rates and offers a valuable way to get people to engage in a firm’s content.
The powerful and revolutionary impact of this is that when information is shared by a person or organsation on a social media network, it is deemed to be of quality. Thus, it is users who are increasingly determining where pages are ranked in search results.
Whether your company creates a YouTube channel to show company videos, Slideshare to host presentations, or uses Pinterest to share new infographics or images, these activities can increase the reach of an organisation’s content.
The notion of communications being a transmit-receive relationship is no more. Rather, social media is supplying us all with the ability to have a conversation with each other.
Social media has provided a feedback loop, where clients can respond to publications by business and engage with them. What this can mean is that when firms publish content, they can engage clients in a discussion and gain their thoughts and perceptions.
Businesses can now understand what their clients and other audiences think of their content and brand. This shows that the company is willing to listen to its audience.
Social media can assist firms to advertise their brand identity and personality. This is obviously crucial for targeting potential clients but, equally, many firms are seeing the value that LinkedIn has in helping companies with their recruitment strategies.
Asset manager Pimco has an extremely active LinkedIn page posting new jobs. E&Y Asset Management uses Facebook for graduate recruitment.
There may be some reluctance from the industry to use social media with clients; however, this has not stopped HR departments from harnessing the opportunities that such platforms can provide.
It isn’t just about helping clients understand you better, either. Rather, the range of insights organisations can garner from social media users’ activity and data can help them understand their clients and prospects in a way that has never before been possible.
Social media monitoring tools like Radian6 or Sysomos, that are increasingly being used across the industry, are helping companies monitor and, over time, engage in conversations about their brand and issues. This may be through understanding which Twitter profiles clients follow, or articles they comment on or “like”. Armed with that data, firms can target communications and products more effectively.
While much has been discussed about how the fund industry can use social media to promote content to different audiences, engage with them in new ways and understand clients better, the ultimate end goal of this is to generate leads for business opportunities.
One of the most effective means of lead generation is third-party endorsement. Therefore, you are able to have clients, prospects and wider audiences promoting, discussing and circulating your content to an audience you would never have before reached.
Companies embarking on social media strategies and becoming more willing to surrender some control of their public profile, by relying on external endorsement and validation of their content, will have a more credible and powerful message.
There is, ultimately, a range of benefits that social media can provide all companies, whether promoting themselves to retail consumers, or pension funds. However, these opportunities and benefits will not emerge by just having a Facebook page or Twitter profile. It is essential for all businesses, especially the funds industry because of the nature of its audience, to undertake a series of important steps in developing an effective strategy to utilise social media for a B2B audience.
This could be achieved if you:
• Outline social media goals so each business unit can monitor how it supports their activities
• Research how target markets want to be communicated to
• Secure buy-in from senior management
• Listen to what your target market are saying about you and your competitors to tailor your strategy
• Create a dedicated social media team with senior buy-in across your whole organisation
• Try out strategy on smaller projects to build understanding
• Measure the impact of your campaign by defining effective metrics
• Learn from others but do not be afraid to pioneer a new approach
Ultimately, social media means a brand is no longer determined by what a company says about itself. Rather, it is determined by what others say.
The task now is for businesses to understand what is being said about them, learn how their existing content can be used on social platforms and devise new marketing strategies that capture their desired identity in the minds of their target audience.
Chris Jackson is head of digital at Cicero Consulting
©2012 funds europe